The U.S. Treasury Department announced Wednesday it is selling 6 billion U.S. dollars of common stock it holds in American International Group (AIG) to help reduce the government's stake in the bailed-out insurer.
The Treasury also said that AIG intended to buy back up to 3 billion dollars of common stock sold by the Treasury at the initial public offering price.
The Treasury also reached an agreement with AIG for it to repay the U.S. government's remaining 8.5 billion dollars preferred stock investment in the company.
The announcements are part of the Treasury's ongoing efforts to exit its stake in AIG, recover taxpayers' money, and wind down the Troubled Asset Relief Program (TARP)-- a financial bailout program created in late 2008 when the financial tsunami struck the world's largest economy.
During the financial crisis, the U.S. government's support for AIG totaled around 180 billion dollars. AIG has repaid part of the government's bailout.
After the expected repayment of 8.5 billion dollars preferred stock investment -- and before accounting for any expected proceeds from Wednesday's proposed common stock offering -- the Treasury's remaining outstanding investment in AIG would total approximately 41.8 billion dollars, the Treasury said.